Financial Efficiency Ratios are a set of financial metrics that measure a company’s efficiency in deploying its resources and managing its activities. These ratios compare the amount of income earned relative to the amount of expenses incurred, as well as analyze how quickly the firm is able to convert its inventory into sold products or services. These ratios are important indicators for investors, helping them to evaluate how efficient the firm is in generating profits and whether its operations can generate a healthy return on investment. Furthermore, by monitoring these ratios over time, management can get an overall picture of how effective their strategies are at creating value for the business.